Sarbanes-Oxley 404 Compliance

After the financial scams of ENRON and WorldCom in the United States, SOX Section 404 (Sarbanes-Oxley Act Section 404) mandates that all publicly-traded companies must establish internal controls and procedures for financial reporting and must document, test and maintain those controls and procedures to ensure their effectiveness. The objective of SOX Section 404 is to reduce the possibilities of corporate fraud by increasing the stringency of procedures and requirements for financial reporting.

Both the PCAOB and SEC guidance contain frameworks that involve applying specific risk factors to determine the scope and evidence required in the assessment of internal control. At each step, qualitative or quantitative risk factors are used to focus the scope of the SOX404 assessment effort and determine the evidence required. Management is required to document how it has interpreted and applied its frameworks to arrive at the scope of controls tested. In addition, the sufficiency of evidence required is based upon management and the auditor's assessment. We have provided the assurance service of compliance with SOX404 to ChipMOS Technologies and Tailin which are the Taiwan listed companies and also the significant subsidiaries of IMOS, the US issuer and listed in NASDAQ.